In unusually shut votes, Amazon shareholders ship messages on exec pay, labor, and surroundings
New numbers reveal an undercurrent of Amazon shareholder opposition to the company’s board and management on issues including executive pay, the environment, and working conditions.
In a regulatory filing Friday afternoon, Amazon disclosed the vote totals from its annual shareholder meeting held Wednesday morning.
There were more close votes than at any other point in Amazon’s recent history. In several cases, the outcome would have been reversed if not for the presumptive votes of Jeff Bezos, Amazon’s founder and executive chairman, who has voting power over 12.7% of the company’s outstanding stock.
Shareholders came within 6 percentage points of a majority vote opposing compensation packages for Amazon’s top executives; and within 2 points of approving a shareholder resolution calling on the company to pursue new ways to reduce its use of plastic packaging to address ocean pollution.
A resolution seeking a detailed report on Amazon’s lobbying activity and spending won 47% of the shareholder vote.
Another, requesting an independent audit and report on warehouse working conditions, received 44% of the vote.
The detailed results indicate a degree of discontent that wasn’t evident when Amazon announced, at the Wednesday meeting, that shareholders approved the company’s proposals and rejected a record 15 shareholder resolutions.
Shareholders were more united on the issue of a 20-for-1 stock split, the company’s first stock split in more than two decades. About 84% of outstanding shares were voted in favor of the plan, designed to make individual shares more affordable. The company says the stock split will be reflected in existing shareholder accounts on or around June 3, and trading will be adjusted for the split starting June 6.
Amazon shares closed Friday at $2,302.93, up more than 3.6% for the day, putting its market value at $1.17 trillion.
Shareholder votes are tabulated based on the number of shares cast for or against each proposal, with 50% required to pass a resolution.
Amazon’s board recommended a vote against each of the shareholder proposals, saying it agreed with the sentiment in many cases, but had already taken action or disagreed with the proposed means of addressing the issue.
The vote on executive pay was advisory and would not have nullified executive compensation packages even if it had received less than 50% support. However, it’s a way for shareholders to express their collective opinion on the matter, potentially influencing how the board addresses the issue in the future.
In an unusual move in advance of the meeting, shareholder advisory firms Institutional Shareholder Services and Glass Lewis both recommended that shareholders vote against the pay packages for executives including Amazon CEO Andy Jassy, calling them excessive and misaligned with the company’s performance.
Amazon gave an extensive defense and explanation of its compensation practices in its proxy statement, saying it believes in giving a “modest base salary” along with stock grants that naturally rise or fall in value based on trends in the company’s share price, aligning executives’ interests with those of shareholders.
The company pointed out that the vast majority of Jassy’s compensation package of more than $212 million came from a one-time award of 61,000 shares of Amazon stock that will vest over 10 years. The grant was awarded in conjunction with Jassy succeeding Bezos as CEO last year.
Extraordinary stock grants were also made to Amazon Worldwide Consumer CEO Dave Clark and Amazon Web Services CEO Adam Selipsky as part of their appointments to those positions, vesting over several years.
Plastic packaging, and ocean health
The shareholder proposal on plastic packaging waste was filed by shareholder advocacy group As You Sow, and supported by ocean conservation advocacy organization Oceana, which estimates that Amazon’s plastic packaging waste grew by 29% in 2020 to nearly 600 million pounds. Oceana promoted the resolution in Seattle with billboards, posters and teams of canvassers.
The proposal received more than 35% support last year, and nearly 49% this year.
“Amazon needs to address – and stop dodging – its plastic problem,” said Matt Littlejohn, Oceana’s senior vice president, in a statement following the vote. “The fact that almost 49% of its shareholders are calling on the company to address this issue is clear signal that change needs to happen.”
In advance of the vote, the board said in its proxy statement that it has “taken action to reduce reliance on the use of plastics in a number of areas, including products manufactured by other companies, packaging for shipment and delivery, our Amazon and other private label devices, and our physical stores.”
The company has committed to reach net-zero carbon by 2040 as part of its Climate Pledge.
Labor, union and safety issues
Several proposals focused on labor issues. They come as Amazon faces ongoing unionization efforts in its warehouses, and intense scrutiny of injury rates in its fulfillment network.
The proposal that received 44% of the vote was presented during the meeting by Isaiah Thomas, a worker in the Bessemer, Ala., warehouse that has emerged as a flashpoint in the union campaign.
Thomas called Amazon’s working conditions “physically unsustainable,” “abusive,” and “ruthless,” saying its facilities “are more high pressure and dramatically more dangerous” than any other warehouses.
“Maybe that’s why Amazon has an estimated employee turnover rate of over 150%,” he added. “Shareholders, you’ll have to apply for a warehouse job at this rate. Investors love to think about their returns. But what about the safety of the people who helped you get those returns?”
The proposal called for “an independent audit and report of the working conditions and treatment that Amazon warehouse workers face, including the impact of its policies, management, performance metrics, and targets.”
Addressing a shareholder question about warehouse safety issues during the meeting, Jassy said he has personally spent time with the numbers and found that “there are a lot of ways you can spin that data.”
Jassy cited the fact that injury rates are higher for new workers, noting that Amazon hired 300,000 people in 2021 alone.
“If you look at the industry averages vs. our numbers, we’re a little higher on warehousing and a little lower on messengers and couriers and grocery, so about average, but I take no solace in being average,” he said. “We want to be the best in the industry.”
He cited several company initiatives to improve safety, including wearable technology that lets workers know when they’re moving in ways that could lead to injuries, and algorithms that predict when repetitive actions could cause injuries, so that workers can be moved to different activities.
Jassy acknowledged that the company has “a lot of work to do here.” However, he added, you can bet we’re going to be very focused on it.”
One longtime Amazon director, Judith McGrath, received 78% of the vote in favor of her reelection to the board. Nominated directors typically receive more than 90% approval.
Glass Lewis and New York City officials had lobbied against McGrath’s reelection, citing worker treatment and executive pay issues, and her role as chair of the Amazon board’s Leadership Development and Compensation Committee.
Amazon issued a statement defending the board’s Leadership Development and Compensation Committee, saying in part that the committee “takes its role very seriously and has overseen human capital management during a time when Amazon has regularly received recognition as a top employer.”
The company also cited several measures of progress on issues including safety, diversity, equity, inclusion and compensation.
See Amazon’s 2022 Proxy Statement for more details on each proposal, and the company’s responses.
Update, Saturday morning: Brad Lander, the New York City comptroller, issued a statement on the vote results, calling the vote on McGrath “a stinging rebuke to Amazon’s leadership regarding the company’s high injury rates, unsustainable turnover, and blatant violations of workers’ rights to freedom of association.”
Corrected reference to organization that filed the plastic packaging resolution.
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